New housing bill won’t help tenants or landlords

David Alexander is an expert on the Scottish property marketDavid Alexander is an expert on the Scottish property market
David Alexander is an expert on the Scottish property market
Scottish Government’s latest attempt at shaping property market won’t solve housing woes

The recent Housing (Scotland) Bill has been met with almost universal dismay by all involved in the housing sector. Landlords, property investors, builders, and housing organisations have all stated that they don’t believe this is the solution to Scotland’s current housing woes. Rather than being viewed as a solution to Scotland’s housing crisis it is regarded as a continuation of policies which, rather than improving the situation for tenants, will actually make things worse.

Given that rent controls have never worked in any country where they have been introduced and have always made things worse for tenants it seems extraordinary that the Scottish Government has stated that restricting rents in the future will somehow make the current housing shortages better.

Hide Ad
Hide Ad

The bill states that it will reduce homelessness and decrease the number of people living in temporary accommodation. This is a worthy aim, but this is not the proposal to deliver that outcome. Since the cost-of-living legislation was introduced in October 2022 the number of homeless households has increased by 10% rising to 53,111 adults and children.

The Scottish Government doesn't seem to understand how the rental market works (Picture: Ian Georgeson)The Scottish Government doesn't seem to understand how the rental market works (Picture: Ian Georgeson)
The Scottish Government doesn't seem to understand how the rental market works (Picture: Ian Georgeson)

While the bill assumes that controlling the private rented sector (PRS) will resolve this issue the Scottish Government’s own data shows that most people are made homeless from their home because of a breakdown with family, parents, partners, friends, or other factors unrelated to the PRS. The Bill, therefore, will do little to help tenants now or in the future.

But the practical application of this Bill is also extremely problematic. Announcing a rent control area is dependent on every local authority collating detailed appropriate data on the current levels of rent charged and the levels of rent increases that have occurred in recent years.

No additional funding has been announced to help Scotland’s severely cash strapped councils to help with creating these rent reports and no assistance is on offer to help implement and monitor rents.

Indeed, this new policy is very similar to rent pressure zones which were mooted in Scotland in 2016 which required local authorities to collate relevant data on rent rises, prove that rent rises are causing problems for tenants, resulting in councils coming under pressure to provide additional housing. To date there have been no rent pressure zones introduced so it is unclear how this new system will be any more effective in creating rent control areas.

You would assume that if local authorities thought that this would work, they would have implemented this policy particularly, since four councils have now declared a housing emergency.

There are, therefore, clear issues with the policy, the implementation, and the future monitoring of this proposal. Unfortunately, in the meantime, the signal that it sends could do serious harm to the housing sector as it ignores the fact that landlords, property investors, and corporate institutions have the very real option of relocating elsewhere or of simply walking away from the sector.

At a time when funding for more social housing has been slashed it seems perverse to target the PRS which is the only viable housing alternative that tenants have in Scotland.

Hide Ad
Hide Ad

One redeeming element is that the first reporting period for these proposals has been set for November 2026 which means that the existing system remains in place until that date. There are general and Scottish elections being held before then, and events may intervene in the coming two and a half years which render this ill-conceived bill obsolete.

David Alexander is CEO of DJ Alexander Scotland Ltd



Want to join the conversation? Please or to comment on this article.